This blog contains posts and comments written by students in Dr. Tufte's economics classes at Southern Utah University.
10/31/2005
Fed likely to raise rates again
Interest rates are once again on the rise. I think that the main reason for the hike in the interest rate is an attempt to slow down inflation. With higher interest rates comes slower growth. Fed officials are watching the economic data closely as they try to determine when they can stop raising rates, but the last report on personal income and spending last month is unlikely to change them from their current trend. After our country recovers from its recent disasters I know it will become a flourishing place for a long time.
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1 comment:
-1 on Connor's comment for a non-sentence. (Your understanding of macro isn't that hot either).
Yes, the Fed is tapping on the brakes. They've done this about a dozen times over the last 2 years. It is fairly standard for them to try and slow the economy down a bit when it gets going. They'd rather "tap the brakes" when the economy is strong then hit them harder when there is a problem.
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